how to build a spreadsheet for the start-up costs for your business?

To begin don't go overboard on your Start-Up Costs:

When calculating your initial start-up costs, bear in mind that you will most likely need a few months of funding to cover expenses before you even open for business. And remember that it will take a significant amount of time until the business is self-funding so plan for this in your startup cost plan.

If you approach banks and other lenders for money, try to include a substantial reserve for running operations so that you will have enough money to set up an office, take orders, hire employees, and cover other related costs. No one gets it right first time so be reasonable with your revenue assumptions in the early stages and conservative with cost projections. As an added precaution it's also possible to structure a small-business loan to defer payments during the initial operating period.

Expenses for a business startup are found in six broad categories:

(a) Cost of sales: inventory, equipment, shipping, warehousing, etc

(b) Professional fees: lawyers, trademarks, copyrights, drafting agreements, etc

(c) Technology costs: computer hardware and software, peripherals such as printers and scanners, phones, website development, Internet access, etc

(d) Administrative costs: insurance, supplies, permits, packaging, utilities, etc

(e) Sales and marketing costs: stationary, marketing materials, advertising, PR, trade-shows, etc

(f) Wages and benefits: salaries, taxes, health insurance, workers comp, etc Cash inputs and cash outputs

Ideally, during the business cycle, you will have more money flowing in than flowing out. This will allow you to build up cash balances with which to plug cash-flow gaps, seek expansion, and reassure lenders and investors about the health of your business.

You should note that income and expenditure cash flow rarely occur together, with inputs often lagging behind. Your aim must be to speed up the inputs and slow down the outputs.

Cash inputs

* Payment for goods or services from your customers.

* Receipt of a bank loan.

* Interest on savings and investments.

* Shareholder investments.

* Increased bank overdrafts or loans.

Cash outputs

* Purchase of stock, raw materials, or tools.

* Wages, rents, and daily operating expenses.

* Purchase of fixed assets - PCs, machinery, office furniture, etc.

* Loan repayments.

* Dividend payments.

* Income tax, corporation tax, VAT, and other taxes.

* Reduced overdraft facilities.

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